After a solid start to 2026, following three consecutive years of strong performance, March proved to be a sharp setback for Nordic hedge funds. The downturn was driven in large part by the outbreak of conflict in the Middle East that effectively shut down the critical Strait of Hormuz, one of the world’s most important oil transit chokepoints. The industry, as measured by the Nordic Hedge Index, declined 2.6 percent during the month, making it one of the five most difficult months since 2009.
All five strategy sub-indices within the Nordic Hedge Index ended the month in negative territory. Relative resilience was observed among CTAs, macro, and managed futures strategies, which declined just 0.2 percent on average. Even after trimming some gains, this cohort remains the strongest performer year-to-date, up 4.2 percent.
Fixed income and multi-manager strategies posted more pronounced losses, down 2.2 percent and 2.3 percent, respectively. Despite the drawdown, multi-manager funds remain among the few strategy groups still in positive territory for the year. Diversified strategies, including multi-asset, multi-strategy, and niche approaches, fell 3.3 percent on average, pushing their year-to-date performance into negative territory at minus 1.1 percent.
Equity long/short managers also struggled, declining 3.0 percent in March and extending their losses for 2026 to 3.2 percent. Long-only equity managers, tracked separately from the main Nordic Hedge Index, experienced an even steeper decline of 4.5 percent during the month.
Performance dispersion widened notably in March, driven by a particularly weak showing among the worst-performing funds. The top quintile of managers delivered an average return of 1.9 percent, down from 4.5 percent in February, while the bottom quintile fell 7.6 percent, more than double the decline seen in the previous month. By comparison, February saw the bottom cohort lose 3.3 percent. Overall, only 17 percent of reporting funds generated positive returns in March.
Best Performing Nordic Hedge Funds in March
Despite broad-based weakness across strategies, a handful of funds managed to navigate the turbulent environment successfully, predominantly within systematic macro and trend-following approaches. Among the relatively small group of funds that ended the month in positive territory, several delivered standout results. Lynx Asset Management’s systematic strategies performed strongly across the board. Lynx Systematic Macro led the way with a gain of 14.7 percent, while Lynx Constellation returned 7.2 percent and the flagship trend-following program, Lynx, advanced 2.4 percent.
Colosseum Global Alpha, after a difficult start to the year, continued its rebound with a gain of 7.9 percent in March. Volt Diversified Alpha Fund, which combines systematic macro and trend-following strategies, added 3.8 percent during the month.
Direct lending Scandinavian Credit Fund gained 2.7 percent during the month. The fund has been closed since spring 2023 and is currently in a wind-down phase. Meanwhile, Proxy Renewable Long/Short Equity also posted a strong result, advancing 2.6 percent in March.
Top Performing Long-Only Equity Funds
In September of 2023, HedgeNordic introduced a new sub-strategy category to the Nordic Hedge Index: Equity Long-Only (ELO). This category is home to funds that would fall short of qualifying as a hedge fund due to their long-only trading approach but exhibit habitual characteristics of a hedge fund strategy (e.g., leverage and derivatives usage, portfolio concentration, fee structure, a spin-off of a long/short strategy, and absolute return objectives, among others).
